Partnering for innovation

Why partnering with customer intimate suppliers is critical for continuous innovation in the medical device industry.

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Keith Glaser, Director, Medical & Hygiene, YKK (U.S.A.) Inc., is part of YKK's team of medical industry experts who work one-on-one with customers to find solutions to their unique challenges.

A recent benchmarking study from BCG found that leading medical technology innovators consistently outperform peers in top-line growth while protecting or growing gross margins. A common thread between all these companies is a commitment to invest in R&D. Another unifying characteristic is that these innovators embrace external partnerships.

With their unique perspective and capabilities, suppliers are ideal resources to help medical device manufacturers innovate, drive competitiveness, and enhance profitability. But innovation can go even further when manufacturers align themselves with suppliers that bring a new level of insight that can only result from the formation of trusting, intimate relationships with their customers.

While many suppliers will say they are customer focused, fewer can say they are truly customer intimate. And the two approaches are fundamentally different. One of three value disciplines articulated by Michael Treacy and Fred Wiersma, customer intimate companies don’t just deliver what the market wants. Instead, they prioritize what their strategic customers want. These companies continually tailor their products and services to consistently deliver the best total solution to their customers.

In this article, we’ll explore the distinctive attributes of customer intimate companies and how the added value they bring fosters continuous innovation. 

Profiling customer intimate companies
While there is no obvious, outward signifier that a company prioritizes customer intimacy, there are a few clues that medical device manufacturers can look for. One easy place to start is to examine who else a supplier works with. Do competitive and innovative companies choose them as a partner? If so, that is a good sign for what they could bring to the table with any new relationship.

Another hallmark of customer intimate companies is how they sell. Instead of taking a “one size fits all” approach or simply selling a product or part, customer intimate companies are dedicated to finding high-impact and lasting solutions. Doing that requires suppliers to listen with an open mind to the challenges their customers face as well as their goals before recommending a solution. What is it that the customer truly needs? A product? An idea? Technical or manufacturing support? Something else? If the best solution for the customer is not what the supplier offers, they should value the relationship enough to provide a referral to other suppliers, resources, or relationships to help meet the greater need. Adding on to that, customer intimate companies will proactively leverage their supply chain partners and relationships across their network to develop the ideal solution. While the result might not be the least expensive product or service available, it should be the one that best provides what the customer wants and needs. It may even solve a problem or need the customer didn’t know they had.

Results management is another area where customer intimate companies differentiate themselves. Many suppliers consider the sale complete when the purchase order is signed and look at customer service transactionally. Customer intimate companies have a different view on that, and instead, focus on end-to-end experience building and take steps to ensure the proper implementation of the solution, down to the assembly and packaging processes. Customer intimate suppliers will also commit their own resources, include technical support, to maximize outcomes.

A final distinguishing characteristic of customer intimate companies is their willingness and ability to adapt relationships so they remain productive over the long term. Foundationally, these organizations have a culture rooted in the creation of highly productive partnerships with customers. They go beyond simply building strong relationships and invest in fostering trust, transparency, and respect at multiple levels of the customer organization. Customer intimate suppliers also use every point of interaction to learn as well as analyze and drive insights that create value and support a steady stream of innovation. 

The impact on innovation
Medical device manufacturers that align themselves with customer intimate suppliers win in two ways: increased impact, speed and rate of innovation and reduced total cost of ownership of their products. The innovation that results might be incremental around products that address specific market needs or transformational where the product requires shared investment to meet commercial, financial, and regulatory challenges. These partnerships can also produce innovation that yields consistent incremental cost reductions or a new production paradigm and quantum reduction in cost.

Regardless of whether the resulting innovation is incremental or transformational, the value of partnering with a customer intimate supplier is clear. These suppliers commit to shaping products, processes, and services to fit an increasingly refined view of their customer – to that customer’s immense benefit. While the approach is expensive for the supplier, rather than considering the cost in the context of a single transaction, it is seen as an investment in a long-term partnership.

The best customer engagements yield ideas that neither party has considered before. In our experience, the commitment to collaboration and the deeper level of customer understanding reached by aligning product development, manufacturing and administrative functions of both brand and supplier are the keys to success and remain essential to unlocking continuous innovation in the medical device industry. 

About YKK
Founded in 1934, YKK solves complex fastening and attaching challenges for the medical device market with a focus on cost control, quality, and regulatory compliance. YKK’s portfolio spans from tailored and off-the-shelf product solutions to machinery and is supported by deep engineering expertise and integrated production capabilities in 70+ countries and regions. The company serves as a trusted technical advisor and engaged partner to help customers with lifecycle management, new product development, changes in capacity needs and high-volume production.

YKK’s collaborative, “solutions-first” philosophy brings a different approach to the medical device market, resulting in tangible excellence that can be seen, touched, felt, and heard.

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